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| By | Financial planning

Medicare is a rite of passage for American seniors. It’s a valuable source of insurance at a time when our income and health can be uncertain or unstable. The majority of us are automatically eligible for Medicare around the time we retire — at age 65. However, Medicare has options and choices, and these may not be clear upon first glance.

Putting the Pieces Together

Medicare is made up of many parts, so it’s important to educate yourself and learn Medicare-related terminology. Hospital insurance, which is referred to as Part A, is most valuable when we need long-term care for medical purposes. If you or your spouse worked for more than 10 years and had Medicare taxes taken from your income, you usually won’t pay a premium for this portion of your Medicare benefits, although there are copays and deductibles.

Medical insurance, Part B, is separate and covers your doctor visits, medical supplies, and some therapies. It may even cover smoking or alcohol cessation programs. You’ll pay a premium for Part B of $135.50 up to $460.50, the latter is if your income is greater than $500,000. The Centers for Medicare and Medicaid Services has a chart that fully explains both Part A and Part B premiums, deductibles, and copays.

Part C is where things begin to get confusing and when resources such as the Medicare Plan Finder or licensed insurance agent comes in handy. An agent is helpful when you have questions but aren’t comfortable searching for information on the internet. Part C is private insurance offered by private insurers such as Humana, and it goes beyond Original Medicare, which is Parts A and B combined.

Adding further to the perplexity of Parts A, B, and C is prescription drug coverage, which is another separate benefit. This is Medicare Part D and is perhaps the most difficult to decipher out of all other parts combined. Part D has four distinct phases each calendar year, and there is no single plan out of the possible 15-plus options that cover all drugs.

How Do I Decide?

First, it’s important to know that enrollment in Part A is mandatory if you receive Social Security and wish to continue doing so. If you have private health insurance, you can skip Part B, but it might not be such a great idea considering your rates can change if you don’t sign up during your initial enrollment period, which begins approximately 90 days before your 65th birthday.

Medicare Part C is optional and is the plan with the most options and choices. Many seniors select this plan type, which is also called a Medicare Advantage plan. Before picking anything, talk to your doctor to see if they are in-network for your preferred plan. This step cannot be skipped if you wish to stay with your current provider.

One of the most valuable benefits of an Advantage plan is that many have drug coverage built in. Most Advantage plans, which are either a PPO or HMO in most cases, have a relatively low cost and added perks such as dental and vision insurance. Nearly one-third of all Medicare beneficiaries opt for this form for coverage. Danielle Kunkle Roberts tells Forbes that Advantage plans can change year-to-year, meaning you’ll have to keep up with what it does and doesn’t cover, and you may have to enroll in a new plan periodically to keep the same benefits.

There’s much more to Medicare than a single post can thoroughly explain. If you’re ready to enroll, your best bet is to talk to an agent one-on-one. They can help narrow down your selection based on your finances, health, and specific needs. There’s no reason to go it alone, and doing so may cost you more than you expect.

 

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